By Stacy Augustine, President, CU Strategic Planning
On Oct. 10, 2025, CDFI Fund staff—most of whom were already furloughed—received Reduction in Force (RIF) notices, with a Dec. 13 deadline. While certainly cause for concern, I’m reminded of the words “DON’T PANIC” printed in large, friendly letters on the cover of the fictional Hitchhiker’s Guide to the Galaxy in the novel of the same name, meant to calm intergalactic travelers who might otherwise be overwhelmed by the vastness and chaos of space.
And still, it’s easy to feel overwhelmed by the chaos of current politics. For the 444 CDFI credit unions that built strategies around CDFI grant funding, and for credit union executives considering certification, it certainly can create an uneasy feeling.
The irony? New research released by Filene Research Institute with support from CU Strategic Planning demonstrates that CDFI credit unions deliver exactly the results politicians across the spectrum want: economic growth, financial inclusion, job creation and fiscally responsible community development through public-private sector collaboration.
What the Data Actually Show
Comprehensive research from Filene Research Institute provides evidence of the CDFI Fund’s value among credit unions. Analyzing nearly 4,730 credit unions from 2000 to 2023, the study reveals that CDFI credit unions prove their worth.
For the fiscally minded, CDFI credit unions experience higher ROA and ROE than their non-CDFI counterparts. These credit unions also saw higher growth in asset size than non-CDFIs and nearly doubled their member growth rates compared to non-CDFI credit unions.
These credit unions are putting their certification and grant funds to good use! Community development advocates should rest easy knowing that CDFI credit unions produced:
- Loan volume in dollars nearly 50% higher that of those that are not certified
- Programs to reach populations abandoned by traditional lenders
- Economic multiplier effects, like creating jobs and growing local tax bases
- Measurable improvements in financial inclusion and wealth building
In other words, CDFI credit unions achieve the CDFI Fund’s mission, which is a positive one for all of American society and the economy. Yet this valuable, proven program has been caught up in a much larger political battle.
Today’s CDFI credit unions have refined their approach, integrating community development into core business strategy. They’ve proven that serving underserved communities isn’t charity but for service—and it’s smart business that generates social returns. The grants administered by the CDFI Fund helps amplify these credit unions’ community development work.
The Political Calculus and What’s Actually Frozen
As for the RIFs — this appears to be part of the Trump Administration’s effort to pressure Congress to reach a funding agreement. While previous shutdowns have included targeted furloughs, the scope of this action is highly unusual. Treasury is believed to have issued 1,446 RIF notices agency-wide.
The practical impact of the CDFI Fund’s suspension means credit unions can’t apply for new grants, existing awards aren’t being processed, technical assistance isn’t available for CDFIs that rely on it and thoughtful recertification applications that were already held up for a year sit gathering dust. The longer the delay in awarding the FY2025 Program (Financial Assistance) Awards, the harder it is for CDFIs to implement programs or do the deep impact lending that is central to creating financial stability for members and their families.
The Richmond Fed’s 2025 Biennial CDFI Survey highlighted the types of programs now at risk: payday loan alternatives at Innovations Federal Credit Union, affordable housing initiatives at NOFFCU, disaster recovery loans at JetStream Federal Credit Union, micro-business lending across multiple institutions, and financial counseling programs that achieved 100% staff certification.
CDFI Credit Unions’ Case
CDFI industry groups are rallying. We must speak up for ourselves, the programs CDFI credit unions maintain and the historically disadvantaged members we serve.
More than $8 billion in CDFI Fund awards have generated over $80 billion in investment, job creation and economic development. As Max Villaronga, CEO of Raiz Federal Credit Union, explained in Filene’s report, “CDFI funds create commercial loans that create businesses, which create jobs, which generate more tax space. It creates a reinforcing loop. I look at CDFI as creating virtuous cycles.”
CDFI credit unions serve populations that traditional lenders ignore, not because these populations can’t repay loans, but because serving them requires a hands-on approach that most institutions don’t invest in.
Data alone doesn’t drive policy outcomes in Washington; relationships and advocacy do. CDFI credit unions deliver financial and social returns that justify continued investment. They grow faster, serve more members, maintain strong capital positions and create measurable community impact. So, as we navigate this uncertain political galaxy, it’s easy to feel as if the stars are shifting faster than our charts can keep up. But like any good traveler consulting The Hitchhiker’s Guide to the Galaxy, we’d do well to remember those reassuring words printed on its cover: “DON’T PANIC.”
The CDFI credit union movement has weathered turbulence before, and each time, we’ve emerged stronger, more connected, and more determined to serve those who need us most. The data, the impact, and the communities we serve all point in one direction: forward. As long as we stay the course, advocate together, and keep faith in the mission, the future of community finance is, quite literally, full of possibility.
CU Strategic Planning supports credit unions in becoming CDFI certified, earning financial and technical awards, and consulting on how to use the funds wisely. Contact us to discuss how your credit union can effectively engage in this critical conversation.